Testing Needs to Be Flexible and Have Reasonable Diversity

- The control system must be appropriate to the level of the workers and the atmosphere of the system. A strict control system applied in a system where highly qualified and skilled workers have significant participation in the decision-making process is likely to fail.

- The control system must be simple (the fewer control points the better) to create maximum freedom and opportunity for subordinates to use their experience, ability and ingenuity to complete assigned work.

7.2.2.5. Testing should be flexible and have reasonable diversity.

- There must be a control system that allows for effective measurement, evaluation, and adjustment of activities in the event of changes in plans, unforeseen circumstances, or outright failures. For example, to meet this control requirement, people have switched from using a fixed budget system to a flexible budget system.

- In testing, it is necessary to combine many different forms and testing techniques for the same test object.

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7.2.2.6. Testing must be effective

Control techniques and approaches are effective when they are capable of clarifying the causes and correcting potential and actual deviations from plans at the least cost.

Testing Needs to Be Flexible and Have Reasonable Diversity

This requirement requires that the benefits of testing be commensurate with its costs. This is simple to state but difficult to implement. Managers often have difficulty determining the value and cost of a given testing system. To reduce testing costs, it is necessary to select the essential elements in areas that are important to them; testing can be economical if it is tailored to the work and size of the facility.

7.2.2.7. Focused testing

This requirement requires identifying essential operational areas and essential checkpoints and focusing attention on those areas and checkpoints.

7.2.2.8. Inspection location

This requirement requires that the inspection not only be based on statistical reports but must be conducted at the place of operation.

7.2.3. Subjects of inspection

7.2.3.1. Board of Directors' inspection

The Board of Directors (BOD) is the highest governing body in the enterprise, with the highest responsibility for the success or failure of the enterprise. The basic functions of the BOD are strategic, organizational and control functions. The issue that the BOD needs to be most concerned about is whether the results achieved are consistent with the overall goals or not, instead of being concerned with specific, trivial activities.

The Board of Directors has the following duties:

- Approve and pass the system of long-term and short-term goals for the entire enterprise as a basis for comparing and evaluating inspection results.

- Regulations on the authority and responsibility of the Board of Directors, the Chairman of the Board of Directors, and the relationship between the Board of Directors, the Chairman of the Board of Directors, and the Director in conducting inspections.

- Approve the content and scope of inspections in each period in the enterprise.

- Approve and approve the system to organize and implement inspections of operational areas for all levels and departments in the enterprise according to specific requirements.

- Approve and approve projects to organize equipment and testing tools for departments and individuals performing inspections.

- Approve and pass the spiritual and material reward and punishment regime for departments and individuals performing inspections.

- Make decisions and check the implementation of decisions. Convene the council, appoint directors, prepare financial statements.

7.2.3.2. Inspection by the Board of Control

The Board of Supervisors is an inspection body elected by the general assembly to perform the inspection function over the business's operations.

The Board of Supervisors has the following duties and powers:

- Check the company's accounting books, assets, financial statements and convene a general meeting when deemed necessary.

- Submit to the general meeting a report on the audit of the company's financial statements.

- Report on unusual financial events that occur, on the advantages and disadvantages in financial management of the Board of Directors.

7.2.3.3. Inspection by the business director

The business director is responsible for:

- Organize and implement the inspection and examination regime for the implementation of tasks, plans, policies, laws, and consider and resolve complaints and denunciations within the authority of the agency or unit.

- Implement requests, recommendations and decisions on inspections of inspection organizations, inspection teams, inspectors or superior management agencies under the responsibility of their agencies and units.

- Create conditions for people's inspection committees in the agency. Specifically:

- Organize comprehensive inspections of all business areas.

+ Loss - Profit.

+ Market status.

+ Efficient use of resources.

+ Product quality.

+ Technical innovation, application of new technology.

+ Social order and security.

+ Check for management system...

- Establish a system of forms and reports suitable for the objectives, requirements, content and scope of inspection of each level and department.

- Prepare periodic reports for the board of directors. The content of the reports must reflect:

+ Business performance compared to planned goals and operating programs.

+ What improvements are needed and how to achieve the goal.

+ Budget requirements needed to conduct the test.

+ Effective testing measures.

+ Program, inspection plan for the coming period.

7.2.3.4. Inspection by members (owners)

Regarding the inspection function, they have the following main powers:

- The right to information about accounting books and business plans.

- Right to be inspected.

- Has the right to check capital transfers as well as check members' participation or non-participation in businesses.

- Appoint a financial inspector.

7.2.3.5. Employee inspection

- Has the right through the administrators who are employees in the board of directors to check the implementation of contracts with employees.

- Check the implementation of the regime of wages, remuneration, labor use, compensation... according to regulations for employees of the enterprise.

- Requires the director to periodically (quarterly, annually) notify employees through the Board of Directors about the implementation of the production and business plan regarding sales and business performance results during the period. Through the Board of Directors, employees must be informed about all issues related to the organization, management and development of the enterprise.

- Organize a people's inspection committee to promptly detect and prevent violations of the law, reflect employees' opinions to business leaders and supervise the implementation of those recommendations.


7.3. INSPECTION PROCESS

It can be said: "Control in management is a systematic effort to determine standards against planned objectives, design feedback systems, compare performance with standards, determine and measure the extent of deviations, and take corrective action to ensure that all resources are used most effectively in achieving objectives"

From the above definition, the inspection process can be divided into stages and implementation directions reflected in the diagram below.


Performance of activities in accordance with standard HT

Have

Are not

Determine the standard testing system

Performance measurement and evaluation

No adjustment required

Make adjustments


Figure 7.4. Testing process diagram


7.3. 1. Building a system of standards

7.3.1.1. Concept of testing standards

Testing standards are the standards that individuals, groups and businesses must follow to ensure the entire business operates effectively.

The standards of testing are very diverse due to the specific nature of businesses, departments and people; due to the diversity of products and services created and due to the countless plans and programs built.

7.3.1.2. Types of test standards

- There are the following basic types of testing standards:

+ The goals of the enterprise, the field, the department and the people. The goals are the best control standards because they are the measure of the success of the plans; they are the basis for evaluating the results of the enterprise's operations and the level of completion of the assigned obligations of the collectives, subsystems and individuals. The goals are often stated in both qualitative and quantitative forms.

+ Program implementation standards are the basis for evaluating the implementation of target programs such as new product development programs, product quality improvement programs, and brand change programs. In addition to goals, people can use time and resource cost indicators to implement the program over time.

+ Quality criteria for products and services such as: product durability, sustainability of construction works...

+ Economic and technical norms for product production and distribution processes such as: number of labor hours for a product unit, number of product units calculated by machine hours, cost for a product or service unit, machine hour cost...

+ Capital standards are the basis for measuring the implementation of investment capital in enterprises such as investment capital recovery, the ratio between current debts and current assets, between fixed investments and total investment...

+ Income criteria, such as revenue per kilometer of passenger bus, amount per ton of steel sold; average sales per customer in a given market area...

- When developing testing standards, it is necessary to pay attention to some requirements:

+ It is necessary to try to quantify the testing standards although many qualitative standards still exist in business due to the nature of human relationships.

+ The number of test criteria should be kept to a minimum.

+ There is broad involvement of practitioners in the development of testing standards for their own operations.

+ Standards need to be flexible to suit the characteristics of each business, department, and person in the business.

7.3.2. Measurement and evaluation of performance

7.3.2.1. Measurement of performance

- Measurements are carried out at essential operating areas and essential checkpoints based on defined content.

- To predict deviations before they become serious, in addition to the final results of the activity, measurements must often be made of the inputs of the activity, signs and changes that can affect the results of each stage of the activity in order to make timely adjustments.

- To draw valid conclusions about activities and performance and the causes of deviations, measurement is repeated using appropriate tools. The frequency of measurement depends on the type of activity being monitored. For example, monitoring is continuous, but progress toward production expansion goals is reviewed by senior management once or twice a year.

- Because the person who monitors and measures performance and the person who evaluates and makes adjustment decisions may be different, a reasonable traditional relationship must be built between them.

7.3.2.2 Evaluation of the implementation of activities

The job here is to look at the conformity of the measurement results with the standard system.

- If performance meets standards, managers can conclude that everything is going according to plan and no adjustments are needed.

- If the performance does not meet the standards, then adjustments may be necessary. However, it is necessary to analyze the causes of the deviation, the consequences from which to conclude whether adjustments are necessary or not? to develop an effective adjustment program.

- If standards are properly set and if measures are capable of accurately determining performance, then assessing actual or future performance is relatively easy. However, there are types of jobs that are not only difficult to set standards for, difficult to measure, but also difficult to evaluate. (For example, the job of the Deputy Director of Finance).

7.3.3. Operational adjustment

This step is necessary if there is a deviation of performance and results from standards and analysis shows that adjustments need to be made.

Adjustments are additional actions in the management process to correct deviations between performance and goals and plans in order to continuously improve operations.

- The adjustment process must comply with the following principles:

+ Only adjust when absolutely necessary.

+ Adjust to the right level, avoid arbitrarily, avoid causing bad effects.

+ Must consider the consequences after adjustment.

+ Avoid missing opportunities, avoid being conservative.

+ Depending on the conditions, combine appropriate adjustment methods.

- To achieve high results in adjustment activities, it is necessary to build an adjustment program to answer the questions:

+ Adjustment target?

+ Adjusted content?

+ Who makes the adjustment?

+ What measures and tools are used for adjustment?

+ Adjustment time?

The adjustment process may lead to changes in some activities of the management object. Sometimes, adjustment leads to modifications of goals, plans, standards, but not changes in activities.

7.3.4. Testing forms and techniques

7.3.4.1. Forms of testing

a. Forms of inspection based on the operational process

Includes basic forms:

- Pre-activity check: Conducted to ensure that the resources required for a certain activity have been budgeted and are fully prepared in terms of type, quantity, quality and at the specified location.

- Checking the results of each stage of operation: Conducted so that timely adjustments can be made before serious consequences occur. This type of checking is only effective if managers have accurate and timely information about changes in the environment and operations.

- Approval (checkable or not): Is a form of control in which specific elements or stages of an operation must be approved or satisfy certain conditions before the operation can continue. For example, the director of a company stipulates that all discounts for customers must be approved by him.

- Post-activity control: Measures the final results of the activity. The causes of deviations from standards and plans are identified and adjusted for similar activities in the future. This form is also applied as a basis for rewarding and encouraging staff and workers.

Although there are four different types of tests, today special emphasis is placed on the importance of predictive tests.

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